probability

There is a reason that economists are so rarely featured in jokes. They tend to be rather dry people, who can and will estimate anything under magical “assumptions” designed to prove their point. In fact, the only jokes with economists I know involve them making assumptions. Which is really a shame because they make hilarious statements like the following all the time:

Economists are nearly unanimous that Ben Bernanke should be reappointed to another term as Federal Reserve chairman, and they said there is a 71% chance that President Barack Obama will ask him to stay on, according to a survey.

Wow. Seventy-one percent, eh? That’s an awfully exact number for a prediction isn’t it? It suggests there was some real numbers computed and weighted in order to arrive at a probability slightly less than 5 out of 7 that Bernanke would be reappointed.

But where did those numbers come from? And what exactly would they be? Moreover, who were the “economists” that are so “nearly unanimous” who arrived at this prediction? Inquiring minds want to know.

Of course, per the article, these same economists are all enthusiastic about the economy having bottomed out, and that Bernanke is largely responsible for that, er … “success”. Perhaps they only interviewed family members of the Fed Chairman who also happen to be economists? “Five out of 7 Bernankes agree!”

By the way, there is a 26.3% chance that only economists and statisticians will comment on this post, but I’m keeping my top-secret formula for arriving at that conclusion all to my self. I’ll give you a hint, though: assume I know what you’re thinking.